TWO WAYS TO INVEST IN BOISE CASCADE UNIT

For years, Boise Cascade Corp.'s office products group, based in west suburban Itasca, was a solid performer amid the turbulent cycles of its parent's massive paper products business. Now, investors will have two ways to invest in the group.

Idaho-based Boise announced last month that it plans to sell about 15% of Boise Cascade Office Products Corp. in an initial public offering (IPO) priced between $22 and $25 a share. The IPO is expected to raise about $95 million, with the parent recouping all but $5 million to pay down debt.

Also last month, the office products group's former wholesale distribution arm-which was sold three years ago to a private partnership, Associated Stationers Inc.-launched a friendly, $267-million tender offer to buy Des Plaines-based United Stationers Inc., the nation's largest wholesale distributor.

When the tender is completed later this month, 20% of the newly merged concern's stock will continue to trade publicly.

Boise Cascade's prospectus wasn't available last week, but analysts view the spinoff company with cautious optimism.

"Boise Cascade's cyclical paper businesses have waxed and waned, but the office products group has been consistently profitable," said Steven Dietrich, an analyst at Jensen Securities Inc. in Portland, Ore. "The stock offering is a good way to raise cash to allow the business to grow even further."

Both United Stationers and Associated Stationers, the latter also based in Itasca, distribute primarily to office supply retailers. Boise Cascade, on the other hand, is a contract stationer, supplying a range of office products directly to large corporations. The company's sales last year rose 33% to $908.5 million, and operating income was up 18% to $42.0 million.

Much of Boise's growth in office products in 1994 was attributed to the mid-year acquisitions of Capitol Office Supply Co. of Atlanta and mail-order specialist Reliable Corp. of Chicago. For its part, United Stationers had made several acquisitions before agreeing to the Associated buyout.

"I think there is a good possibility we'll see more consolidation in this industry in the future," said H. Lloyd Kanev, an analyst with Smith Barney Inc. in New York.

If so, Boise Cascade's IPO should put the spun-off company in a favored position. It could use additional stock offerings to leverage deals in the future, or lean on its parent for borrowings.

"Office Products will have access to capital from Boise back in Idaho if they need it," said Todd Blount, an analyst with A. G. Edwards & Sons in St. Louis. He also notes that Office Products will continue to have a stable supply of paper to support its stationery segment.

However, some observers still are grumbling over United Stationers' agreement to sell for $15.50 per share. "The deal was too cheap, and I'm surprised it was accepted by shareholders," said Brett Brubaker, an analyst with Abraham & Sons, a Chicago asset management firm. "The company was clearly on the mend after a couple of difficult years, and a price in the mid-$20s for the stock was possible by sometime in 1996."

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